The OTC UK power market saw a strong start to Week 40 on the back of supply constraints and a buoyant NBP, only to suffer heavy losses towards the end as comfortable supply margins and a softer NBP pressured the market. Day-ahead Baseload was well supported in the early part of the week. Traders said this was a function of “the underlying tightness of the system,” the result of which was several spikes in the System Buy Price, which reached £350.00/MWh late on Tuesday night. Week 40 Baseload was last assessed on Friday last week at £35.25/MWh, while the average Day-ahead closing assessment in Week 40 was £39.50/MWh, marking a premium of £4.25/MWh, in spite of Wednesday’s Day-ahead Baseload price dropping to £32.00/MWh. Week 41 contracts gained £2.05/MWh on Baseload and £4.50/MWh on Peak shapes, and market participants said this was, by and large, a function of the strength prevalent on Monday and Tuesday, as the prompt ticked off towards the end of the week. Front month contracts nudged down slightly from Monday to Friday, shedding £0.95/MWh on the Baseload and £0.65/MWh on the Peaks. Players said that after a strong start to the week, November products tracked the NBP downwards. This was the scenario for the rest of the near curve, as a weaker NBP for the same period caused downside across the near months. Q1 ’08, as a result, traded down £1.03/MWh on the Baseload and £2.65/MWh on the Peaks from Monday to Friday. The far curve was largely directionless for much of the weak, with a several contracts making slight gains, and several others registering slight losses. 

The UK’s National Grid has pegged its forecasts for Monday’s plant margins at 3,506 MW, which, according to traders, “should cause a squeeze on the market early next week.”